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How to appoint a local service agent in UAE?

How to appoint a local service agent in UAE?

In the UAE’s commercial landscape, there is as statutory requirement that all the foreign businesses need to partner with a local service agent or a local partner before starting a business. The local agent must be a resident of UAE, and it can be an individual or a corporate entity. In this article, we will discuss how to open a local agent in UAE and other statutory requirements with the help of best lawyers of UAE.Appointment of local service agent
In the opinion of top lawyers of UAE, the appointment of a local agent creates a binding relationship. There must be an agreement for appointment between the foreign party and the local agent. There is not a standard form of agent agreement, and it tends to differ keeping in mind the needs and requirements of the parties in a transaction. Further, it also depends upon the nature of the new company. For company formation, you can contact the best law firms of UAE.

Essential conditions before appointing an agent

  1. The local service agent must be a resident of the UAE
  2. There must be a written agreement between both the parties, which shall be signed in the presence of a notary public and two witness. In the absence of witness, the agreement would be nullified.
  3. The language of the agreement should be Arabic and English.

The local service agent agreement must encapsulate the following information also.

Basic Information
The contract or agreement should have a list of basic information, such as name of the parties, their contact details, agreement commencement date, etc.  The agreement should also contain indemnity clause to provide certain protection to both the parties. Further, the agreement should also have a dispute resolution clause to settle the dispute through arbitration. (In case of dispute, you can contact our best lawyers of Dubai to provide you with the best possible solution)

Contractual parties
The parties to a local service agent agreement have a principal servant relationship. The person who appoints the local servant is known as principal and the local servant agent is the servant.  As coined by the top lawyers of Dubai, there exists a vicarious liability of the principal. It means that the foreign investor will be responsible for all the acts of the local service agents performed during the course of employment.

Limitation of the authority
The powers and the authorities of both the parties should be clearly spelt in order to avoid future troubles. Generally, all the high-stake matters are dealt by the principal and the matters involving lower stake is handled by the local agent. However, it is important to note that a local agent cannot be deprived of crucial business decisions.

Fee Schedule
In the entire agreement, the most fundamental and the most crucial part is the fee schedule. The agreement should have a detailed breakdown for the fees of the local service agent in UAE. There are various methods of making the fee payment, such as giving monthly remuneration, return on equity, etc.

How can we help you?
The appointment of a local agent is one of the most essential conditions for starting a company in UAE. BSB Legal is the best law firm of UAE having top lawyers having wide range of experience in drafting local service agent agreement, obtaining necessary approvals and formation of companies. To register your company with BSB Legal, contact us.

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